As profits fall and charges rise, the discount airline announces plans to reduce capacity to the city by a fifth in the next financial year.

The British discount airline easyJet has announced that it will cease basing its crew and aircraft at its Madrid base from this winter, citing overcapacity in the Spanish airline market. High airport charges are another factor: costs have more than doubled in the past two years and are likely to be subject to further above-inflation increases.

EasyJet operates more than 200 planes across 23 bases in the UK and mainland Europe. Even after the proposed changes, which will reduce its capacity to and from Madrid by around 20 per cent in the next financial year, the airline expects to carry over 12 million passengers in and out of Spain next year. According to the airline, some 70 per cent of passengers on its Spanish flights start their journey from other parts of Europe and demand from these passengers remains strong.

The airline is now reviewing a range of options for its eight Madrid-based aircraft and 310 crew. All of its pilots and cabin crew in Madrid will be offered jobs in its other bases; easyJet hopes to retain as many staff as possible.

Any restructuring costs arising out of this proposal will be accounted for in the current financial year. EasyJet expects its capacity to increase by around 5 per cent in the year ending September 2012.